U.S.-Canada trade talks collapse, massive tariffs to take effect
Trade talks between the U.S. and Canada fell apart late Friday night, and both sides said steep new tariffs will go into effect. Why it matters: It's an unprecedented breakdown in relations with the second-largest U.S. trading partner. Catch up quick: Trump last month threatened to invoke Section 338 of the Tariff Act of 1930 to hit a slew of Canadian goods with additional 50% duties, including…
U.S.-Canada trade negotiations collapsed late Friday, with both nations announcing the imposition of hefty tariffs on a variety of goods. This unprecedented diplomatic rupture marks the first time since 1930 that a U.S. president has used Section 338 of the Tariff Act to impose additional 50% duties on Canadian products, including alcohol, hockey equipment, cement and dairy items.
The tariffs were initially set to take effect at midnight on Wednesday. However, they were temporarily postponed for three days as both countries reportedly reached a deal. U.S. Trade Representative Jamie Isham Greer later disclosed that Canada made last-minute demands that clashed with the agreement, Bloomberg reported. Canada's Prime Minister Mark Carney also accused the U.S. of making last-minute changes to the terms and declared a suspension of negotiations.
Carney vowed that Canada would match the tariffs dollar for dollar to shield its workforce and businesses. The exact nature of this retaliation remains undetermined. According to Census data, trade between the U.S. and Canada reached $376 billion in the first half of the year, making it the second largest trade partner for the U.S., only trailing Mexico.
This aggressive move is the most significant trade action yet by the U.S. following more than a year of threats to impose stronger tariffs against Canada.
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